HUD Secretary Says CHA Sitting on Too Much Money

HUD Secretary Julian Castro said Wednesday that Mayor Emanuel has provided a plan to spend $440 million in savings. View Full Caption

DNAinfo/Sam Cholke

BRONZEVILLE — U.S. Department of Housing and Urban Development Secretary Julian Castro said the Chicago Housing Authority is holding too much money in reserve Wednesday while in Chicago to introduce new rules that push public housing authorities to alleviate segregation.

After a news conference at Park Boulevard, 3720 S. Dearborn St., Castro said the Chicago Housing Authority’s reserves were “higher than ought to be the case” and he has been questioning Mayor Rahm Emanuel on his plan to spend the money.

According to the CHA’s last annual financial statements from 2013, the agency is sitting on at least $440 million, even after pumping an extra $55 million into its pension fund and paying down debts early over the prior two years.

Castro said he was aware of the reserves and that it “is a concern” and HUD is encouraging the CHA to invest more of its money.

Unlike with other public housing authorities, the CHA does not face the same limits on how much it can hold in reserve, and HUD is not able to reclaim unused federal money under CHA’s Move to Work agreement.

Emanuel said he met with Castro last week in Washington, D.C., and has been on the phone with the HUD secretary in prior weeks.

Castro said he's satisfied with a plan that Emanuel presented to start spending down the reserves.

"We have a plan to spend the reserves on key housing developments, retail and job-creation projects at Altgeld, Park Boulevard, Cabrini and Lathrop Homes," said Wendy Parks, a spokeswoman for the CHA.

Parks pegged the current reserves held by the CHA at $221 million, though the figure could not be independently verified.

"The increase in CHA’s reserves was driven by the significant downturn in the real estate market‎," Parks said. "However, ‎this year CHA will invest $240 million ‎to build affordable housing units across the city on top of the $135 million spent last year to develop affordable housing for low-income families and seniors."

She said the plan to spend down the reserves has been presented to and worked out with HUD.

Castro was in Chicago Wednesday to announce new rules that would release more HUD data to the public and requires some communities to look into patterns of segregation and do more to alleviate it by distributing government resources more evenly.

He said the new rules also give local communities more leeway in how they deal with segregated neighborhoods.

“As a former mayor, I know the federal government should never plan for communities, but collaborate with communities,” Castro said.

Emanuel cheered the new rules as a reinforcment of CHA's efforts to bring back other amenities to neighborhoods when rebuilding on former public housing sites: “Housing without new transportation isolates people,” Emanuel said. “Housing without a new grocery store is just housing.”